Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

City council beats a “strategic” retreat in ongoing battle over hydraulic fracturing

Denton City Council has decided to lift its ban on hydraulic fracturing, calling the bill’s repeal a “strategic repeal.”

Seven months ago, the city of Denton Texas passed a local ordinance banning hydraulic fracturing. The legislation was met with lawsuits from the oil and gas industry almost immediately, starting a legal battle between Denton and industry groups that were interested in fracing near the city. On May 19, Texas Governor Greg Abbot signed House Bill 40, which “expressly preempts regulation of oil and gas operations by municipalities and other political subdivisions that is already impliedly preempted by state law,” according to the bill’s text.

Earlier this month, Denton City Council considered repealing the ban, saying HB 40 made it unenforceable. Some residents asked the city council to move forward with the ban regardless, triggering litigation that would require the courts to decide whether or not to uphold the ban.

In the end, Denton City Council decided 6-1 to repeal the ban in order to end litigation against the city that came about during the ban, reports The Denton Record-Chronicle. According the text of the initiative repeal, “Denton City Council reluctantly deems it in the best interest of the citizens of this City to strategically repeal Initiative Ordinance 2014-01 (the Denton frac ban).”

“We need to let go of the rope,” said council member Greg Johnson. He went on to call the decision to repeal the ban the least of three evils in two lawsuits against the city.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.